Background Behind The Sale of Runnells Hospital to Center Management

5683bf0772ac134cc377_best_f95cbe348b74b5cc1465_Runnells-Edited-Building-300x280.jpg
5683bf0772ac134cc377_best_f95cbe348b74b5cc1465_Runnells-Edited-Building-300x280.jpg

In a press release issud by the County of Union on Monday, Dec. 15,  regarding the sale of Runnells Specialized Hospital to Center Management, they provided the following facts regarding the background and process of the sale.

Background and Process 

Facing an uncertain financial future of declining Medicare and Medicaid reimbursements, the County of Union in 2012 retained Complete HealthCare Resources-Eastern, Inc. to independently and objectively analyze and evaluate possible options for the Hospital. The study was to seek ways to reduce costs and enable the Hospital to react to a changing health-care environment by determining if and how Hospital operations could continue in the present environment and the future in light of  the anticipated reduction in the Medicare/Medicare reimbursements and increases in the County's subsidy of the Hospital.

Sign Up for E-News

After analyzing the operations of the Hospital, CHR issued a report in January, 2013, which concluded that due to declining reimbursements, decreasing occupancy rates and Medicare census, rising employee and operational costs and capital expense requirements, the County should consider several options for the continuation of the Hospital, such as revenue enhancements, expense reductions and alternative ownership.

Based upon the conclusions and recommendations of the CHR Report, the County determined to explore transferring the Hospital operations to the Union County Improvement Authority for the possible transfer of such operations to a third-party, while simultaneously evaluating methods of revenue enhancement and expense reduction.

The Authority is authorized to cooperate and plan with the County for the acquisition or operations of a public facility such as the Hospital, including the purchase of the County's rights, title and interest in the Hospital and the possible sale and lease back of the Hospital operations to a third party to provide for the continuous public operation of the Hospital.

Later in 2013, as authorized by their respective resolutions, the County and the Authority entered into a Memorandum of Understanding,  pursuant to which the Authority was required to undertake a Request for Qualifications and Proposals ("RFQ/P") process seeking a private provider that wished to purchase or lease the Hospital.

The Authority then established a Review Committee, which included representatives from the County and the UCIA, for the RFQ/P process, and which received five (5) proposals in December 2013, four (4) of which were for the purchase of the Hospital and one of which offered a lease option, and the Committee determined to proceed to interview four (4) of the proposers having found one (1) proposal incomplete.

The Review Committee interviewed the Proposers at least twice, and has, in compliance with the requests and suggestions of  the Board of Chosen Freeholders, sought additional information from the Proposers, and allowed the Proposers to make revised offers.

The Review Committee sought and received an independent appraisal of the Hospital, which appraised value was determined to be $26,000,000 and the Review Committee finally presented the Proposers with a series of questions and also requested that they provide a "best and final offer" to purchase the Hospital.

By the end of February, 2014, the proposers submitted responses and their best and final offers to the Review Committee, and the Committee prepared a report of the proposers, proposals, and a recommendation of one of the Proposers, Center Management Group, with which to negotiate a contract of sale of the Hospital.

In November, the County decided to pursue a lease back of the Cornerstone Psychiatric Unit of the Hospital after the state advertised for private companies to run the psychiatric unit, seeking to lower costs, and Center Management was unsuccessful in obtaining an agreement with the state. State reimbursements for psychiatric care are expected to keep net costs for running Cornerstone at about $700,000 annually, the same amount currently spent for the unit.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Berkeley Heights

Union County College’s Drama Club to Present “12 Angry Jurors”

April 25, 2018

CRANFORD – Union County College’s Drama Club will be performing for their spring show the play, “12 Angry Jurors,” as adapted by Sherman L. Sergel and based on the Emmy award-winning television movie by Reginald Rose. The play is based on the same plot as “12 Twelve Angry Men,” but by being named “12 Angry Jurors” both men and women appear in the ...

Paint by the Pond Event to be Held at Warinanco Park

ROSELLE/ELIZABETH, NJ - Children ages 4 to 12 years old are invited by the Union County Board of Chosen Freeholders to participate in the third annual Paint by the Pond. A project that teaches families about the importance of recycling while encouraging children to paint on cardboard, creating art from materials usually thrown away.

There will also be miniature houses made with the cardboard ...

The Mayor Addresses a Question on Tax Credits for Businesses

April 25, 2018

Some citizens have suggested that Berkeley Heights and any other New Jersey municipality can and should grant “tax breaks” or “tax credits” in the hopes of enticing businesses downtown. However, the law is clear and it does NOT allow municipalities to give “tax credits” to businesses.

Article VIII of the New Jersey State Constitution, Section 1 states, ...

Politics IS Government in Union County

After Bruce Patrson of Garwood was stopped from speaking at the Union County freeholder meeting of March 22 regarding the politics behind refusing to give the party line to a sitting freeholder I thought this brazen suppression of free speech could not go unanswered. A the the April 19 meeting I answered with these comments.

After ten years of following government in Union County I conclude ...

New Providence Borough Council to Cultivate Relationships with County Officials

April 12, 2018

NEW PROVIDENCE, NJ – Councilman Robert Robinson touted the importance of personal relationships with Union County representatives at the Monday, April 9 council meeting.

Union County Freeholders Angel Estrada and Bette Jane Kowalski attended the Street Smart campaign kick-off event prior to the meeting providing the council members with the opportunity to chat face-to-face with the two ...

Student Led #Rally4 Action to Protest Gun Violence Held Friday in Springfield

April 21, 2018

SPRINGFIELD, NJ - Fueled partially by their disappointment that students were not allowed to leave school for the nationwide student protest last month, student leaders planned a rally Friday on the nineteenth anniversary of the Columbine massacre in Colorado. At 4:30 p.m., students, parents, families, community members met at Chisholm Community Center to register voters, make ...

Student Led #Rally4 Action to Protest Gun Violence Held Friday in Springfield

April 21, 2018

SPRINGFIELD, NJ - Fueled partially by their disappointment that students were not allowed to leave school for the nationwide student protest last month, student leaders planned a rally Friday on the nineteenth anniversary of the Columbine massacre in Colorado. At 4:30 p.m., students, parents, families, community members met at Chisholm Community Center to register voters, make ...